Shenzhen municipal government-backed Guoxin Securities has filed an application with the China Securities Regulatory Commission (CSRC) to set up a fund company in which Guoxin has a controlling stake. Industry sources said Guoxin would take a 50 per cent stake in soon-to-be-formed Peng Hua Fund Management, carrying a registered share capital of 80 million yuan (about HK$74.46 million). Guoxin already holds a 25 per cent stake in Boshi Fund Management - the fifth company licensed by the CSRC to operate as a fund manager. The balance in Peng Hua would be shared equally by Beijing International Trust and Investment Corp, Zhejiang Securities, Liaoning-based Anshan Trust and Investment Corp and Shenzhen-based United Securities. Peng Hua could prepare for the start-up once it received CSRC approval. The procedure would be followed by the submission of another set of documents, including issuing particulars for mutual funds. Industry sources said a state-approved mutual fund could be launched as early as this month, if everything went smoothly. The Guoxin-led consortium, like the first five funds, is a close-ended fund of two billion yuan for investment in listed stocks and treasury bonds. The fund would be listed in Shenzhen. Guoxin is expected to lead the way for the second round of mutual-fund launches.